Despite (tepid) consecutive monthly job growth over the past few months, we’ve been disappointed in the types of jobs that the economy has been adding. April brought a shift towards better-paying jobs, but is this a trend or an anomaly?
In the month of April an estimated 223,000 jobs were added to the economy, according to the Labor Department’s monthly jobs report causing the unemployment rate to drop to 5.4 percent – the lowest rate since 2008.
Last month was the first for time for a while since the kinds of jobs added weren’t low-skilled, low-paying jobs in retail and fast food industries. No disrespect to those jobs, because they provide a paycheck and training, especially for teenagers and low-skilled workers starting with these jobs and hoping to move to better jobs. But this report reflected growth in other kinds of jobs.
Professional and business services and construction led the job growth adding 62,000 and 45,000, respectively. These jobs typically pay more than minimum wage. The average construction worker earns $27.28 per hour, which is almost ten percent higher than other private-sector workers paid on an hourly basis. The healthcare industry also added a number of jobs.
In comparison retail added just 12,100 jobs in April, less than half the average of the previous three months, while leisure and hospitality added 17,000. The average job growth in hospitality and leisure totaled a monthly average of 24,000 this year and 40,000 last year.
We hope this is not just a one-off month. We’ll have to wait until the figures get revised either up or down over the next month to see as these are just estimates.
However, the bigger contributor to the lower unemployment rate is that many American workers have dropped out of the job market. The recession has had a devastating effect on our workforce. While some jobs have returned, millions of workers have not. They’ve either retired or given up looking for work. Beyond numbers on a page, these are painful stories.
Wall Street Journal reports:
In many parts of the country, and at the national level, falling unemployment appears to truly reflect recent improvement. The Labor Department reported Friday that the U.S. jobless rate ticked down in April to 5.4%, its lowest level in nearly seven years.
But the falling rate doesn’t tell the full story of a recovery that remains uneven nearly six years after the recession ended. Among the 20 metropolitan areas where unemployment fell by at least 2.7 percentage points in the past year, 16 also saw their workforces shrink over the same period, according to Labor Department data. Half of those were in Michigan or Illinois, including Detroit, Decatur, Flint, Mich., and Rockford, Ill.
Most places saw at least some hiring and job creation. In Decatur, though, payrolls fell over the past year due to layoffs, attrition, transfers or other causes.
The fitful recovery in Decatur has laid bare challenges building for decades in many places in the Midwest and Northeast. Populations are shrinking, and the workforce is getting older. A historical reliance on manufacturing has hurt aging industrial cities as the U.S. economy continues its shift to service jobs. And the recession expanded the share of the working-age population who don’t have a job and aren’t looking for one.
Each month we wait to assess the health of the economy on the unemployment rate, a measure economists consider a lagging indicator because it follows changes in the economy. While the overall unemployment rate has fallen, it hides the more sinister impacts on our workforce.
When Americans can find work, particularly meaningful work at salaries or wages that afford them the ability to take care of themselves and their families, we’ll feel better about the economy. However for those featured in the WSJ article, the economy is anything but good and that’s true for workers across the country.